The IPO Dry Spell Of 2016 Has Come To An End

Two biotech companies made their public debuts on Wednesday, finally putting an end to an IPO dry spell that has plagued the New Year.

BeiGene, a company out of China that is developing cancer drugs, closed 18% higher than its IPO price of $24. Editas Medicine, a gene-editing company backed by Bill Gates, ended the day 14% above its IPO price of $16.

Companies have been hesitant to go public in a tumultuous market, which is ridden with fears about China, plunging oil prices and a potential emerging market debt crisis.

Subprime online lender Elevate Credit looked as if it would be the first company to go public in 2016. However, it postponed its January IPO, citing "current market volatility." Another financial services company, AmeriQuest, also postponed its January IPO.

The painful start to the New Year suggests another slow year for initial public offerings. Last year, just 170 companies went public, which represented a 39% drop from the previous year, according to Renaissance Capital. It was the slowest year for IPOs since 2009.

While January is typically a sluggish month for IPO activity, it was the first month since 2011 when not a single company sought the public markets.

To be sure, BeiGene and Editas both put forward small offerings, selling 6.6 million shares and 5.9 million shares, respectively.

However both stocks were in the green on Wednesday, bucking the market's declines. The S&P 500 was down 0.5% on Wednesday and the iShares Nasdaq Biotechnology index was down 0.9%.

"These two IPOs could breathe life back into the IPO market after a deal-less January," wrote Renaissance Capital analysts in a blog post.

The companies went public on the NASDAQ exchange, with the tickers "BGNE" and "EDIT."